Fleet News

Mileage fiddling adds to multi-billion pound fraud

COMPANY car drivers fiddling their mileage claims are contributing to an expenses fraud that is costing UK businesses billions of pounds a year.

Although only a small part of overall fraud, fleets are warned that it was common practice for company motorists to ‘round up’ their business mileage expenses claims while keeping their fingers crossed that they will not get caught.

It is estimated that fraud could account for 6% of a company’s turnover – costing a small to medium-sized enterprise with a £10 million turnover up to £600,000 every year.Up to 45% of companies are victims of expense fraud and fleets are being urged to put systems in place in a bid to stamp out the problem.

One suggestion is to introduce automated expense systems but any put in place need proper review and monitoring to ensure they are effective.

Random audits on expense claims can also discourage employees from making false or exaggerated claims.

Although difficult to assess the total effect of fraud on UK businesses as much of it goes unreported, it is estimated that it could be between £5 billion and £12 billion every year.

Speaking at Cracking Down on Expenses, a seminar held at the Business Travel Show in Birmingham, Simon Nelson, European managing director of expense automated system company Concur Technologies, outlined common areas where employees claim for more money than they have spent.

Fraudulent claims can include unapproved upgrades, inaccurate exchange rates for people who travel overseas, missing receipts and ‘padded’ mileage claims.

He added: ‘It’s one of those grey areas where people submitting their mileage claims form don’t know exactly how many miles they have covered so they just round it up. If you do that regularly you get a good deal of extra money.’

Another speaker, Val Stevens, head of procurement at ATS Euromaster, said expense claim fraud was an epidemic that needed eradicating. She said: ‘People think it’s fine to pad their expenses – it’s a mentality we all have to crack.’

Stevens told delegates she was drawing on examples of expenses fraud from her career in procurement at many companies rather than at ATS Euromaster. But at her current company, Stevens has set a limit of £10 on claims where receipts have gone missing.

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